Planning is a key element to running a successful business. To get where you want to go, you'll need a business plan to guide the way.
Most businesses don't have any kind of plan – and consequently they don't really go anywhere, or certainly don't fulfil their true potential. So, start with a simple plan that pinpoints what you want to achieve. Here's an example :-
1. In five year's time, I want the business to be worth £5m
2. To achieve this, it must make annual profits of at least £750k
3. To achieve this, it must have sales of at least £6m
4. I need to increase my sales by, on average £1m a year
5. To do this I will need to : (a) increase my customer base by 15%; (b) increase the number of times my customers buy from me by 20%; (c) raise prices by 10%.
Having developed a basic plan, it's time to identify the constraints you think may get in the way of successful implementation. Consider the following :-
1. Inside the business, what are the principal constraints on our growth? Some possibilities
- Lack of capital (financing)
- Lack of credit from suppliers
- Too many customers owing you money
- Underperforming owners / attitude issues
- Underperforming staff / attitude issues
- Internal conflicts
- Lack of direction
- Outdated technology
- Lack of marketing
- Missing skills
- Retirement and succession issues
- Undesirable customers
- Excessive payroll
- High occupancy / property costs
2. Outside the business, what are the principal constraints on our growth?
- The economy
- Regulations
- Competition
- Demographics
- Energy prices
- Shipping costs
What you should find is that you can't do much about the outside constraints but you can do a lot about internal constraints.
… and suddenly you have a high level business plan that sets out your overall objectives and allows you to start taking detailed action in specific areas so that you move towards your ultimate target.
If you haven't started your Business Plan yet – do it tomorrow
